BHP has continued its move away from thermal coal after completing its divestment of the Cerrejón thermal coal mine in Colombia.
Glencore will become the sole owner of Cerrejón, having bought out BHP and Anglo American’s respective 33.3 per cent interests in the project.
The divestment was first announced in June 2021 and comes as Glencore tries to responsibly manage its coal assets.
“Based on our long-term relationship with Cerrejón and knowledge of the asset, we strongly believe that acquiring full ownership is the right decision and the progressive expiry of the current mining concessions by 2034 is in line with our commitment to a responsible managed decline of our coal portfolio. Production volumes are expected to decline materially from 2030,” Glencore said in a June statement.
“We have reviewed the impact of owning 100 per cent of Cerrejón and are confident our climate commitments will not be compromised by this partner buy-out.
“We have further reviewed our planned fossil fuel production profile and are now able to commit to more aggressive total emission reduction targets.”
Glencore announced it would increase its medium-term absolute total emissions reductions target across Scope 1, 2 and 3 from 40 per cent to 50 per cent by 2035. The company also announced a new short-term reduction target of 15 per cent by 2026.
The deal was worth a purchase price consideration of approximately $US588 million ($US294 million each company), and Glencore intends to make a cash payment of $US101 million upon completion.
In a statement, BHP said divesting Cerrejón represented the best outcome for the coal mine and its stakeholders going forward.
The company first acquired its one-third interest in Cerrejón in 2000 and the mine is considered one of the largest open-cut thermal coal mines in the world.